This BriefingsDirect thought leadership interview comes in conjunction with The Open Group Conference in Washington, D.C., beginning July 16. The conference will focus on how security impacts the enterprise architecture, enterprise transformation, and global supply chain activities in organizations, both large and small.

We're now joined on the security front with one of the main speakers at the conference, Joel Brenner, the author of "America the Vulnerable: Inside the New Threat Matrix of Digital Espionage, Crime, and Warfare."

Joel is a former Senior Counsel at the National Security Agency (NSA), where he advised on legal and policy issues relating to network security. Mr. Brenner currently practices law in Washington at Cooley LLP, specializing in cyber security. Registration remains open for The Open Group Conference in Washington, DC beginning July 16.

Previously, he served as the National Counterintelligence Executive in the Office of the Director of National Intelligence, and as the NSA’s Inspector General. He is a graduate of University of Wisconsin–Madison, the London School of Economics, and Harvard Law School. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]

Brenner: Let’s make a distinction here between the political-military espionage that's gone on since pre-biblical times and the economic espionage that’s going on now and, in many cases, has nothing at all to do with military, defense, or political issues.

The other stuff has been going on forever, but what we've seen in the last 15 or so years is a relentless espionage attack on private companies for reasons having nothing to do with political-military affairs or defense.

So the countries that are adept at cyber, but whose economies are relatively undeveloped compared to ours, are at a big advantage, because they're not very lucrative targets for this kind of thing, and we are. Russia, for example, is paradoxical. While it has one of the most educated populations in the world and is deeply cultured, it has never been able to produce a commercially viable computer chip.Not entrepreneurial

We’re not going to Russia to steal advanced technology. We’re not going to China to steal advanced technology. They're good at engineering and they’re good at production, but so far, they have not been good at making themselves into an entrepreneurial culture.

That’s one just very cynical reason why we don't do economic espionage against the people who are mainly attacking us, which are China, Russia, and Iran. I say attack in the espionage sense.

The other reason is that you're stealing intellectual property when you’re doing economic espionage. It’s a bedrock proposition of American economics and political strategy around the world to defend the legal regime that protects intellectual property. So we don’t do that kind of espionage. Political-military stuff we're real good at.

Gardner: Wouldn’t our defense rise to the occasion? Why hasn't it?

Brenner: The answer has a lot to do with the nature of the Internet and its history. The Internet, as some of your listeners will know, was developed starting in the late '60s by the predecessor of the Defense Advanced Research Projects Agency (DARPA), a brilliant operation which produced a lot of cool science over the years.

The people who invented this, if you talk to them today, lament the fact that they didn't build a security layer into it.

It was developed for a very limited purpose, to allow the collaboration of geographically dispersed scientists who worked under contract in various universities with the Defense Department's own scientists. It was bringing dispersed brainpower to bear.

It was a brilliant idea, and the people who invented this, if you talk to them today, lament the fact that they didn't build a security layer into it. They thought about it. But it wasn't going to be used for anything else but this limited purpose in a trusted environment, so why go to the expense and aggravation of building a lot of security into it?

Until 1992, it was against the law to use the Internet for commercial purposes. Dana, this is just amazing to realize. That’s 20 years ago, a twinkling of an eye in the history of a country’s commerce. That means that 20 years ago, nobody was doing anything commercial on the Internet. Ten years ago, what were you doing on the Internet, Dana? Buying a book for the first time or something like that? That’s what I was doing, and a newspaper.

In the intervening decade, we’ve turned this sort of Swiss cheese, cool network, which has brought us dramatic productivity and all and pleasure into the backbone of virtually everything we do.

International finance, personal finance, command and control of military, manufacturing controls, the controls in our critical infrastructure, all of our communications, virtually all of our activities are either on the Internet or exposed to the Internet. And it’s the same Internet that was Swiss cheese 20 years ago and it's Swiss cheese now. It’s easy to spoof identities on it.

So this gives a natural and profound advantage to attack on this network over defense. That’s why we’re in the predicament we're in.Both directions

Gardner: Let’s also look at this notion of supply chain, because corporations aren’t just islands unto themselves. A business is really a compendium of other businesses, products, services, best practices, methodologies, and intellectual property that come together to create a value add of some kind. It's not just attacking the end point, where that value is extended into the market. It’s perhaps attacking anywhere along that value chain.

What are the implications for this notion of the ecosystem vulnerability versus the enterprise vulnerability?

Brenner: Well, the supply chain problem really is rather daunting for many businesses, because supply chains are global now, and it means that the elements of finished products have a tremendous numbers of elements. For example, this software, where was it written? Maybe it was written in Russia -- or maybe somewhere in Ohio or in Nevada, but by whom? We don’t know.

There are two fundamental different issues for supply chain, depending on the company. One is counterfeiting. That’s a bad problem. Somebody is trying to substitute shoddy goods under your name or the name of somebody that you thought you could trust. That degrades performance and presents real serious liability problems as a result.

The supply chain problem really is rather daunting for many businesses, because supply chains are global now, and it means that the elements of finished products have a tremendous numbers of elements.

The other problem is the intentional hooking, or compromising, of software or chips to do things that they're not meant to do, such as allow backdoors and so on in systems, so that they can be attacked later. That’s a big problem for military and for the intelligence services all around the world.

The reason we have the problem is that nobody knows how to vet a computer chip or software to see that it won't do these squirrelly things. We can test that stuff to make sure it will do what it's supposed to do, but nobody knows how to test the computer chip or two million lines of software reliably to be sure that it won’t also do certain things we don't want it to do.

You can put it in a sandbox or a virtual environment and you can test it for a lot of things, but you can't test it for everything. It’s just impossible. In hardware and software, it is the strategic supply chain problem now. That's why we have it.

If you have a worldwide supply chain, you have to have a worldwide supply chain management system. This is hard and it means getting very specific. It includes not only managing a production process, but also the shipment process. A lot of squirrelly things happen on loading docks, and you have to have a way not to bring perfect security to that -- that's impossible -- but to make it really harder to attack your supply chain.

Notion of cost

Gardner: So many organizations today, given the economy and the lagging growth, have looked to lowest cost procedures, processes, suppliers, materials, and aren't factoring in the risk and the associated cost around these security issues. Do people need to reevaluate cost in the supply chain by factoring in what the true risks are that we’re discussing?

Brenner: Yes, but of course, when the CEO and the CFO get together and start to figure this stuff out, they look at the return on investment (ROI) of additional security. It's very hard to be quantitatively persuasive about that. That's one reason why you may see some kinds of production coming back into the United States. How one evaluates that risk depends on the business you're in and how much risk you can tolerate.

This is a problem not just for really sensitive hardware and software, special kinds of operations, or sensitive activities, but also for garden-variety things.

This is a problem not just for really sensitive hardware and software, special kinds of operations, or sensitive activities, but also for garden-variety things.

Gardner: We’ve seen other aspects of commerce in which we can't lock down the process. We can’t know all the information, but what we can do is offer deterrence, perhaps in the form of legal recourse, if something goes wrong, if in fact, decisions were made that countered the contracts or were against certain laws or trade practices.

Brenner: For a couple of years now, I’ve struggled with the question why it is that liability hasn’t played a bigger role in bringing more cyber security to our environment, and there are a number of reasons.

We've created liability for the loss of personal information, so you can quantify that risk. You have a statute that says there's a minimum damage of $500 or $1,000 per person whose identifiable information you lose. You add up the number of files in the breach and how much the lawyers and the forensic guys cost and you come up with a calculation of what these things cost.

But when it comes to just business risk, not legal risk, and the law says intellectual property to a company that depends on that intellectual property, you have a business risk. You don’t have much of a legal risk at this point.

You may have a shareholder suit issue, but there hasn’t been an awful lot of that kind of litigation so far. So I don't know. I'm not sure that’s quite the question you were asking me, Dana.

Gardner: My follow on to that was going to be where would you go to sue across borders anyway? Is there an über-regulatory or legal structure across borders to target things like supply chain, counterfeit, cyber espionage, or mistreatment of business practice?Depends on the bordersBrenner: It depends on the borders you're talking about. The Europeans have a highly developed legal and liability system. You can bring actions in European courts. So it depends what borders you mean.

If you’re talking about the border of Russia, you have very different legal issues. China has different legal issues, different from Russia, as well from Iran. There are an increasing number of cases where actions are being brought in China successfully for breaches of intellectual property rights. But you wouldn't say that was the case in Nigeria. You wouldn't say that was the case in a number of other countries where we’ve had a lot of cybercrime originating from.

So there's no one solution here. You have to think in terms of all kinds of layered defenses. There are legal actions you can take sometimes, but the fundamental problem we’re dealing with is this inherently porous Swiss-cheesy system. In the long run, we're going to have to begin thinking about the gradual reengineering of the way the Internet works, or else this basic dynamic, in which lawbreakers have advantage over law-abiding people, is not going to go away.

Think about what’s happened in cyber defenses over the last 10 years and how little they've evolved -- even 20 years for that matter. They almost all require us to know the attack mode or the sequence of code in order to catch it. And we get better at that, but that’s a leapfrog business. That’s fundamentally the way we do it.

Whether we do it at the perimeter, inside, or even outside before the attack gets to the perimeter, that’s what we’re looking for -- stuff we've already seen. That’s a very poor strategy for doing security, but that's where we are. It hasn’t changed much in quite a long time and it's probably not going to.

We’re talking about the Balkanization of the Internet. I think that's going to happen as more companies demand a higher level of protection.

Gardner: Why is that the case? Is this not a perfect opportunity for a business-government partnership to come together and re-architect the Internet at least for certain types of business activities, permit a two-tier approach, and add different levels of security into that? Why hasn’t it gone anywhere?

Brenner: What I think you’re saying is different tiers or segments. We’re talking about the Balkanization of the Internet. I think that's going to happen as more companies demand a higher level of protection, but this again is a cost-benefit analysis. You’re going to see even more Balkanization of the Internet as you see countries like Russia and China, with some success, imposing more controls over what can be said and done on the Internet. That’s not going to be acceptable to us.

Gardner: We’ve seen a lot with cloud computing and more businesses starting to go to third-party cloud providers for their applications, services, data storage, even integration to other business services and so forth.

More secure

If there's a limited lumber, or at least a finite number, of cloud providers and they can institute the proper security and take advantage of certain networks within networks, then wouldn’t that hypothetically make a cloud approach more secure and more managed than every-man-for-himself, which is what we have now in enterprises and small to medium-sized businesses (SMBs)?

Brenner: I think the short answer is, yes. The SMBs will achieve greater security by basically contracting it out to what are called cloud providers. That’s because managing the patching of vulnerabilities and other aspects and encryption is beyond what’s most small businesses and many medium-sized businesses can do, are willing to do, or can do cost-effectively.

For big businesses in the cloud, it just depends on how good the big businesses’ own management of IT is as to whether it’s an improvement or not. But there are some problems with the cloud.

People talk about security, but there are different aspects of it. You and I have been talking just now about security meaning the ability to prevent somebody from stealing or corrupting your information. But availability is another aspect of security. By definition, putting everything in one remote place reduces robustness, because if you lose that connection, you lose everything.

Consequently, it seems to me that backup issues are really critical for people who are going to the cloud. Are you going to rely on your cloud provider to provide the backup? Are you going to rely on the cloud provider to provide all of your backup? Are you going to go to a second cloud provider? Are you going to keep some information copied in-house?

By definition, putting everything in one remote place reduces robustness, because if you lose that connection, you lose everything.

What would happen if your information is good, but you can’t get to it? That means you can’t get to anything anymore. So that's another aspect of security people need to think through.

Gardner: How do you know you’re doing the right thing? How do you know that you're protecting? How do you know that you've gone far enough to ameliorate the risk?

Brenner: This is really hard. If somebody steals your car tonight, Dana, you go out to the curb or the garage in the morning, and you know it's not there. You know it’s been stolen.

When somebody steals your algorithms, your formulas, or your secret processes, you've still got them. You don’t know they’re gone, until three or four years later, when somebody in Central China or Siberia is opening a factory and selling stuff into your market that you thought you were going to be selling -- and that’s your stuff. Then maybe you go back and realize, "Oh, that incident three or four years ago, maybe that's when that happened, maybe that’s when I lost it."

What's going outSo you don’t even know necessarily when things have been stolen. Most companies don’t do a good job. They’re so busy trying to find out what’s coming into their network, they're not looking at what's going out.

That's one reason the stuff is hard to measure. Another is that ROI is very tough. On the other hand, there are lots of things where business people have to make important judgments in the face of risks and opportunities they can't quantify, but we do it.

We’re right to want data whenever we can get it, because data generally means we can make better decisions. But we make decisions about investment in R&D all the time without knowing what the ROI is going to be and we certainly don't know what the return on a particular R&D expenditure is going to be. But we make that, because people are convinced that if they don't make it, they’ll fall behind and they'll be selling yesterday’s products tomorrow.

Why is it that we have a bias toward that kind of risk, when it comes to opportunity, but not when it comes to defense? I think we need to be candid about our own biases in that regard, but I don't have a satisfactory answer to your question, and nobody else does either. This is one where we can't quantify that answer.

Gardner: It sounds as if people need to have a healthy dose of paranoia to tide them over across these areas. Is that a fair assessment?

People need to understand, without actually being paranoid, that life is not always what it seems. There are people who are trying to steal things from us all the time, and we need to protect ourselves.

Brenner: Well, let’s say skepticism. People need to understand, without actually being paranoid, that life is not always what it seems. There are people who are trying to steal things from us all the time, and we need to protect ourselves.

In many companies, you don't see a willingness to do that, but that varies a great deal from company to company. Things are not always what they seem. That is not how we Americans approach life. We are trusting folks, which is why this is a great country to do business in and live in. But we're having our pockets picked and it's time we understood that.

Gardner: And, as we pointed out earlier, this picking of pockets is not just on our block, but could be any of our suppliers, partners, or other players in our ecosystem. If their pockets get picked, it ends up being our problem too.

Brenner: Yeah, I described this risk in my book, “America the Vulnerable,” at great length and in my practice, here at Cooley, I deal with this every day. I find myself, Dana, giving briefings to businesspeople that 5, 10, or 20 years ago, you wouldn’t have given to anybody who wasn't a diplomat or a military person going outside the country. Now this kind of cyber pilferage is an aspect of daily commercial life, I'm sorry to say.

About Dana GardnerAt Interarbor Solutions, we create the analysis and in-depth podcasts on enterprise software and cloud trends that help fuel the social media revolution. As a veteran IT analyst, Dana Gardner moderates discussions and interviews get to the meat of the hottest technology topics. We define and forecast the business productivity effects of enterprise infrastructure, SOA and cloud advances. Our social media vehicles become conversational platforms, powerfully distributed via the BriefingsDirect Network of online media partners like ZDNet and IT-Director.com.
As founder and principal analyst at Interarbor Solutions, Dana Gardner created BriefingsDirect to give online readers and listeners in-depth and direct access to the brightest thought leaders on IT. Our twice-monthly BriefingsDirect Analyst Insights Edition podcasts examine the latest IT news with a panel of analysts and guests. Our sponsored discussions provide a unique, deep-dive focus on specific industry problems and the latest solutions.
This podcast equivalent of an analyst briefing session -- made available as a podcast/transcript/blog to any interested viewer and search engine seeker -- breaks the mold on closed knowledge. These informational podcasts jump-start conversational evangelism, drive traffic to lead generation campaigns, and produce strong SEO returns. Interarbor Solutions provides fresh and creative thinking on IT, SOA, cloud and social media strategies based on the power of thoughtful content, made freely and easily available to proactive seekers of insights and information.
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Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a multi-faceted approach of strategy and enterprise business development. Andrew graduated from Loyola Un...

Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. His social media "Klout"​ score is 81 and rising!

The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.

DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City.
Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.
A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throughout enterprises of all sizes.

With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors!
In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading these essential tips, please take a moment and watch this brief video from Sandy Carter.

DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to info@dxworldexpo.com. Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expensive intermediate processes from their businesses. FinTech brings efficiency as well as the ability...

DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.

DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.

@DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises - and delivering real results.

With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence around personal data.

Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.

DXWorldEXPO LLC announced today that Dez Blanchfield joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Dez is a strategic leader in business and digital transformation with 25 years of experience in the IT and telecommunications industries developing strategies and implementing business initiatives. He has a breadth of expertise spanning technologies such as cloud computing, big data and analytics, cognitive computing, machine learning and the Internet of Things.

Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to advisory roles at startups. He has worked extensively on monetization, SAAS, IoT, ecosystems, partne...

Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also received the prestigious Outstanding Technical Achievement Award three times - an accomplishment befitting ...

DXWorldEXPO LLC announced today that Kevin Jackson joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City.
Kevin L. Jackson is a globally recognized cloud computing expert and Founder/Author of the award winning "Cloud Musings" blog. Mr. Jackson has also been recognized as a "Top 100 Cybersecurity Influencer and Brand" by Onalytica (2015), a Huffington Post "Top 100 Cloud Computing Experts on Twitter" (2013) and a "Top 50 Cloud Computing Blogger for IT Integrators" by CRN (2015). Mr. Jackson's professional career includes...

Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve full cloud literacy in the enterprise world.